Online retailers’ shares surge by a 42% in Ecommex index

Dato

Ecommerce businesses outperformed the UK’s traditional retailers by a factor of over two to one during the first nine months of the year, according to Clearwater Corporate Finance.

The mid-market advisory firm’s Ecommex index, which tracks the share prices of listed ecommerce companies worldwide, increased 42% between January and September.

By contrast, the FTSE 350 UK General Retailers index rose by only 19%. America’s S&P Comp 1500 Retailing Index fared slightly better at 25%, but still lagged behind Clearwater’s Ecommex index of online businesses.

Among the internet retailers enjoying a strong first nine months of 2012 was Amazon. The US giant’s share price rose 42% to $254 on the back of buoyant demand for its Kindle e-readers and more third-party sellers, from which it derives healthy margins of about 10%.

UK-based online fashion retailer ASOS fared even better, with its price rising 65% to 2,197p on AIM, fuelled by international expansion into Australia, Spain and Italy.

However, not all online retailers performed well. Blue Nile, a US-based seller of diamonds and jewellery, saw a decline in its share price as weak demand and inflation took their toll on sales.

Gareth Iley, head of Clearwater’s consumer group, said: “While it may be unsurprising to see ecommerce businesses outperforming traditional retailers, the gap between the two groups is significant. Two of the companies we highlighted, Amazon and ASOS, have grown at rates that their high street peers can only dream of.

“Our research, though, highlights that not all ecommerce firms have enjoyed unmitigated success so far in 2012. The experience of Blue Nile demonstrates that online retailers are, like high street shops, still subject to pressures like inflation and flagging demand.

“Despite that, we expect our Ecommex index to continue to rise fast, fuelled by the continuing migration of sales from high street to online.”